Shares of Jet Airways today settled with gains of over 19 per cent, adding Rs 746 crore to its market capitalisation as the Abu-Dhabi based Etihad paid $ 70 million to the Indian carrier Jet for three Heathrow slots.

In what is seen as a step towards closing its proposed investment plans in Jet Airways, Etihad Airways today said it has paid $ 70 million to buy three slots of the Naresh Goyal-promoted airline at Heathrow Airport in London.

Regarding the ongoing stake sale talks between the two, Etihad said they continue to progress with discussions about further investment in Jet.

Reacting to the news, the shares which were on a down slide for the last five trading sessions surged to touch an intra-day high of Rs 537.75 on the BSE, a rise of 20 per cent from their previous closing price.

At the close of trading, the stock was trading at Rs 534.85, higher by 19.27 per cent from its previous closing price.

Fuelled by the spike in the share price, the market capitalisation of the company increased by Rs 746 crore to Rs 4,617 crore from Rs 3,871 crore in the previous trading session.

Today’s deal further strengthens the existing commercial relationship between the two airlines, which came into effect in July 2008, making provision for code-sharing, Etihad said.

On the 24 per cent proposed stake sale to Etihad, Jet sources said, Jet has reportedly agreed to cede more management control, including more board positions to Etihad.

However, this could not be officially verified with either Jet or Etihad officials.

If materialised, this will be second FDI in the domestic aviation sector after Malaysian carrier AirAsia announced a 49:51 per cent partnership with Tatas and Telestra Tradepalce of Arun Bhatia in the middle of this month to launch a low-cost airline.

(This article was published on February 27, 2013)
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